exv10w42






Exhibit 10.42



1660 Wynkoop Street, Suite 1000

Denver, Colorado 80202-1132

Phone: (303) 573-1660

Fax: (303) 595-9385

Email: info@royalgold.com

www.royalgold.com









April 3, 2008




Mr. Mike Scott, President

MinEx Projects (PTY) Limited

Dunkeld Court

16 North Road

Dunkeld West

Johannesburg

2196

Republic of South Africa




Dear Mr. Scott:



Royal Gold, Inc. (“Royal Gold”) sincerely appreciates the invitation from MinEx Projects (PTY)
Limited (“MinEx”) to submit an offer to purchase the Messina and Dwaalkop royalty interests, as
defined in the Royalty Background document previously provided by MinEx. Royal Gold is pleased to
submit the following offer for MinEx’s consideration.




I. THE OFFER



Royal Gold offers to purchase all of MinEx’s right, title and interest in and to the following two
royalty interests at Lonmin’s Limpopo Mine (collectively, the “Royalties”):





	 	a.	 	The 0.704% gross receipts royalty on the Messina lease area (“Messina
Royalty”); and
	 
	 	b.	 	The 1.5% gross receipts royalty on the Dwaalkop lease area (“Dwaalkop
Royalty”).




Royal Gold understands from information provided by MinEx that the entire Dwaalkop Royalty is
subject to a right of first refusal in favor of Lonmin, as well as to the right to “buy down” the
royalty from 1.5% to 1.0% upon payment to MinEx of $US 125,000. Royal Gold further understands
that the royalties apply to 100% of Net Smelter Revenue derived from production in the Messina and
Dwaalkop areas.



This offer is extended based upon MinEx’s representation to Royal Gold, made by MinEx upon its
execution of this interim agreement, that MinEx and its affiliates are not parties to or otherwise
bound by any letter agreement, letter of intent, contract, agreement or other understanding,
whether written or oral, for the purchase and sale of the Royalties. If this representation is not
accurate, then this offer shall be deemed immediately revoked and shall have no further force or
effect.




 









 








Mr. Mike Scott

April 3, 2008

Page 2




II. THE PURCHASE PRICE



At Closing, as defined below, MinEx shall assign to Royal Gold, and Royal Gold shall purchase from
MinEx, the Messina Royalty for US$6,039,500 in cash, and the Dwaalkop Royalty for US$13,210,500 in
cash, in each case exclusive of South African value added tax, if applicable. This consideration
assumes Royal Gold’s effective ownership of the Royalties commences on January 1, 2008, and the
purchase price for the Messina Royalty of US$6,039,500 shall be reduced by the aggregate of any
royalty payments received by MinEx after February 1, 2008. If Lonmin exercises its right of first
refusal to acquire the entire Dwaalkop Royalty, then Royal Gold shall not acquire the Dwaalkop
Royalty and shall not owe MinEx any consideration in respect thereof.




III. CONDITIONS PRECEDENT



The obligation of Royal Gold to complete the transaction contemplated by this letter is subject to
the following conditions precedent:





	 	a.	 	The negotiation and execution of a mutually acceptable purchase and sale
agreement which shall supersede and replace this interim agreement, and which shall
contain representations, warranties, covenants, indemnifications and other terms and
conditions common to similar agreements, including mutually acceptable assignment and
conveyance documentation. Said agreement shall contain provisions permitting that
agreement to remain valid and enforceable until a mutually agreed deadline for closing
the transactions contemplated herein, subject to certain rights of each party to
terminate said agreement;
	 
	 	b.	 	MinEx shall have delivered certified copies of resolutions of its board of
directors, or other documentation evidencing corporate authority, approving and
authorizing the assignment of the Royalties;
	 
	 	c.	 	Royal Gold shall have received the approval of its Board of Directors for the
acquisition of the Royalties;
	 
	 	d.	 	The parties shall have received all third party and governmental consents or
approvals, without material conditions or restrictions and in form and substance
satisfactory to Royal Gold acting reasonably; and with respect to Royal Gold’s
purchase of the Dwaalkop Royalty, Lonmin shall not have exercised its right of first
refusal to acquire the Dwaalkop Royalty;
	 
	 	e.	 	There shall not have occurred a material adverse change with respect to the
royalty agreements, or the operations or prospects of Messina or Dwaalkop prior to
Closing;
	 
	 	f.	 	Royal Gold’s review of and satisfaction with, among other matters (i) the
ownership, terms and conditions, validity and good standing of the Royalties and the
lands, mineral and mining rights which are subject thereto, and (ii) the adequacy,
validity and enforceability of the agreements creating and
documenting the Royalties, and (iii) the payment history and supporting documentation
for the Messina Royalty;




 









 











Mr. Mike Scott

April 3, 2008

Page 3





	 	g.	 	Royal Gold’s satisfaction with a due diligence technical review of, among
other matters, the Messina Mine and future expansion plans for the Messina and
Dwaalkop lease areas, as well as production profiles associated with the Royalties and
smelting and refining terms; and
	 
	 	h.	 	MinEx’s express representation and warranty to Royal Gold that (i) MinEx and
its affiliates are not bound by any letter agreement, letter of intent, contract,
agreement or other understanding, whether written or oral, for the purchase and sale
of the Royalties, and (ii) neither Royal Gold’s extension of this offer, nor its
acceptance by MinEx, nor the completion of the transactions contemplated herein
conflicts with or constitutes a breach of any other letter agreement, letter of
intent, contract, agreement or other understanding, whether written or oral, to which
MinEx or its affiliates are bound.





IV. CLOSING



The Closing shall be held on a date, time and location mutually agreed upon by Royal Gold and
MinEx. Royal Gold and MinEx shall use their commercially reasonable efforts to hold the Closing on
or before May 30, 2008.




V. EXPENSES



Each of Royal Gold and MinEx shall bear its own costs and expenses associated with this
transaction, including the fees and expenses of counsel or other representatives.




VI. CONFIDENTIALITY



The terms and conditions of this interim agreement, and all subsequent negotiations related to the
transaction contemplated hereunder, shall remain strictly confidential and shall not be disclosed
by one party to any third party without the prior written consent of the other party. Should
either party be obligated to make any disclosure in terms of stock exchange rules, listing
requirements, or statutory obligations, the other party shall have the right to reasonable review
and consent to the content prior to release of any statements, such consent not to be unreasonably
withheld or delayed.




VII. SCHEDULE OF ACTIVITIES



Following approval of this offer by the appropriate authority within MinEx and receipt by Royal
Gold of an executed copy of this interim agreement, Royal Gold will immediately prepare a purchase
and sale agreement for the parties to review and commence its due diligence program. Royal Gold
and MinEx will use best reasonable efforts to conclude negotiation of the definitive purchase and
sale agreement on or before April 25, 2008. MinEx shall give notice to Lonmin of its intent to
transfer the Dwaalkop Royalty no later than April 25, 2008, unless MinEx and Royal Gold mutually
agree in writing to a later date.



Royal Gold will use best reasonable efforts to complete its due diligence program by
May 15th, 2008, subject to the availability of its personnel and its technical and legal
advisors, and to fulfill all suspensive conditions by May 30th, 2008. Royal Gold will
seek




 









 





Mr. Mike Scott

April 3, 2008

Page 4



Board of Director approval for the transaction promptly following satisfactory completion of its
due diligence program. In preparation of this work, we would appreciate it if MinEx would forward
to Royal Gold copies of all guiding agreements and documents that govern the Royalties that have
not already been provided.




VIII. NON-SOLICITATION



Commencing upon MinEx’s execution of this interim agreement and continuing until Closing or
termination of the definitive purchase and sale agreement in accordance with its terms, MinEx shall
not (a) solicit, initiate or encourage submission of proposals or offers from any third person or
entity relating to any purchase, sale or transfer of the Royalties with the exception of offering
the First Right of Refusal on Dwaalkop for a period of 30 days to Lonmin, or (b) enter into or
continue negotiations or discussions with any third person or entity with respect to the purchase,
sale or transfer of the Royalties with the exception of offering the First Right of Refusal on
Dwaalkop for a period of 30 days to Lonmin. MinEx agrees to promptly notify Royal Gold if any such
proposal or offer, or if any inquiry from or contact with any third person with respect thereto, is
made.




IX. GENERAL



This interim agreement and the definitive purchase and sale agreement to be negotiated shall be
governed by the laws of the Republic of South Africa.



Neither party may assign its rights or delegate its duties or obligations hereunder without the
prior written consent of the other party.



No modification or amendment to this interim agreement shall be valid unless made in writing and
approved by both parties.




X. ACCEPTANCE OF THE OFFER



MinEx may accept this offer at any time prior to its expiry by delivering a duly executed copy of
this interim agreement by facsimile or electronic mail, with an original to be couriered to:




Royal Gold, Inc.

1660 Wynkoop St.

Suite 1000

Denver, CO 80202

Attention: William Heissenbuttel



Facsimile: (303) 595-9385

e-mail: bheissenbuttel@royalgold.com



This offer shall expire at 5:00 p.m., Denver, Colorado time, on Thursday, April 3, 2008, unless
extended or withdrawn in writing by Royal Gold prior to its acceptance.




 









 











Mr. Mike Scott

April 3, 2008

Page 5



This interim agreement, including without limitation MinEx’ non-solicitation obligations set forth
in Section VIII, shall expire on June 30, 2008 unless (a) MinEx and Royal Gold have entered into
the definitive purchase and sale agreement contemplated in Section IIIa., in which case the terms
and conditions of such definitive agreement shall govern and control, (b) MinEx and Royal Gold
agree in writing to extend the duration of this interim agreement, or (c) any third party or
governmental consent or approval that has been requested is pending on such date, including any
consent or approval of, or notice from, Lonmin.



Finally, I would emphasize that the purchase price funds are not subject to any financing
contingencies as Royal Gold has sufficient cash on the balance sheet.



I look forward to working diligently with MinEx to promptly consummate a successful transaction for
both parties.




Sincerely,



Tony Jensen

President and Chief Executive Officer



AGREED AND ACCEPTED ON BEHALF OF MINEX PROJECTS (PTY) LIMITED, BY THE FOLLOWING AUTHORIZED
INDIVIDUAL




	 	 	 	 	 
	/s/ Mike Scott	 	 
	 	 	 
	By:

	 	Mike Scott	 	 
	Title:

	 	President	 	 
	Entity:

	 	MinEx Projects	 	 
	Date:
	 	03/04/2008